SAIL RSP’s modernization project flagged off

It is reported that the INR 9,869 crore expansion and up gradation project of Steel Authority of India Limited’s Rourkela Steel Plant has been flagged off.

Mr Naveen Patnaik chief minister of Orissa laid the foundation stone of the mega project on January 4th 2007. Mr Ram Vilas Paswan union steel minister, Mr SK Roongta chairman of SAIL, Mr Jual Oram MP from Sundargarh were also present at this occasion.


The project envisages setting up of blast furnace No 5 along with other expansion and up gradation works to raise RSP’s hot metal production capacity to 4.5 million tonnes from the existing 2 million tonnes. Under the expansion project, crude steel capacity will increase up to 4.2 million tonnes as against the current capacity of 1.9 million tonnes while capacity of saleable steel will go up to 3.9 million tonnes from the present 1.67 million tonnes.

The modernization will also ensure improved quality of products and increase the production volume of value added steel, reduce the energy consumption, take care of environment and cut down cost of production.

POSCO’s entire plan to be considered as a single project

It is reported that the Supreme Court appointed panel has said that POSCO's entire plan, comprising of a steel plant with captive mines and a port, should be reviewed as one single project for its ecological significance and rehabilitation plans. POSCO's plans could run into rough weather, if the apex court accepts the recommendations.

The committee in its report to the SC said that "Instead of piecemeal diversion of forest land for the project, it would be appropriate that the total forest land required for the project including for mining is assessed and a decision for diversion of forest land is taken for the entire forest land.”

It has recommended that the decision be taken only after considering the ecological importance of the area, number of trees required to be felled, adequacy and effectiveness of the rehabilitation and resettlement plan for the project affected persons and benefits accruing to the state. It has told the court that diversion of forest land for the plant, without taking a decision for linked uses, particularly the mining project, may not be in order."

POSCO had earlier contested linking the various components of the mega project. It had claimed in court that the port, steel plant and mines were not a continuous project on ground therefore should be de linked for clearance purposes.

Usually, the environment ministry, on the basis of the report of its Forest Advisory Committee, grants clearances. But in another ongoing case before the SC, the CEC had recently been empowered to review the forest clearances given by the ministry.

This is the latest spanner in POSCO's plans which first faced criticism over iron ore mining rights as it was feared that high grade ore would be shipped out of India, which POSCO denied. It has also faced problems with land acquisition leading to a delay in securing SEZ status. Recently, some of its top executives had to face public ire at the project site. Besides, mining rights are still pending.

On their part, the centre and the Orissa government are according top priority to the project, fearing flight of capital and a dent to India's image if POSCO walked out. To ensure that the investment stayed in India, the government has lined up railway, road and other infrastructure.

SAIL’s Salem SEZ approved

Steel Authority of India Limited has announced that its proposal to set up a special economic zone at Salem has been given formal clearance by the board of approval of the union ministry of commerce.

It is noted that, SAIL has signed a MoU with IL&FS Infrastructure Development Corporation for forming a special purpose vehicle to develop and operate an SEZ for the steel sector at Salem in Tamil Nadu. As per the proposed SPV, SAIL and IIDC would hold equity in equal proportion.

SAIL, which will provide land for the SEZ adjoining its steel plant at Salem, will play the role of an anchor by providing customized steel producers to prospective units that come up in the SEZ. These units would manufacture architectural facades, railway applications, dairy plants, chemical and pharmaceutical plants, machines for the food processing industry, tubes and pipes, auto components, panels for lifts etc.

JSW doing due diligence on iron ore mine in South America

It is reported that JSW Steel is on the verge of acquiring an iron ore mine in South America.

The report cited Mr Seshagiri Rao director finance of JSW Steel as saying that “We are still doing the due diligence on the South American mine and it could take a few more weeks. We can hedge our raw material cost by selling the ore in markets closer to South America and buy ore locally.”

He added that, with this probable acquisition, it can swap the iron ore in America for local iron ore.

TATA emerges as preferred bidder for Jaguar & Land Rovers

It is reported that Ford Motor Co has named TATA Motors Limited as the top bidder for its Jaguar and Land Rover brands and entered into focused negotiations at a more detailed level.

Mr Lewis Booth executive VP of Ford's European units said that "While no final decision has been made, we will proceed with further substantive discussions with TATA Motors over the forthcoming weeks."

TATA Motors confirmed the negotiations on January 3rd 2008. A TATA Company statement said that "We are now entering a period of more focused and detailed negotiations with Ford. We hope both parties can reach an agreement in the forthcoming weeks, though these are complex discussions and there is still much work that needs to be done before that position is reached. We are pleased by the progress in the discussions to date and very positive about the prospects of this business going forward."

Mr Ratan Tata chairman of TATA Company said that acquiring Jaguar and Land Rover would help bring global visibility to his group and a name that until recently was little known outside India. He added that "We need further and more detailed meetings and discussions with Ford and TATA which will focus on the job security of our members in the Jaguar, Land Rover and Ford plants in the UK."

Industry analysts have said that Ford wants to find a buyer who would preserve the Jaguar and Land Rover heritage and jobs in the UK. Ford, which is the top auto seller in the UK, does not want to rankle British customers.

The UK government's business and enterprise department in a statement called the TATA announcement a welcome step toward. It said that "The government's sole concern is to ensure a successful, sustainable future for Jaguar Land Rover in the UK. If TATA is ultimately successful in its bid, the government will work as closely with them as it always has with Ford."

Rotterdam Port and L&T in talks for Greenfield port in India

The Mint reported that the Port of Rotterdam Authority is in talks with India's Larsen & Toubro Limited for a Greenfield port in India and a deal could be announced later this month.

The report cited an official of Port of Rotterdam as saying that ''We are exploring opportunities for port business in India and are in talks with L&T. We believe that 2008 will be a critical year for the project, when we may make an announcement.'' He added that a delegation from the Netherlands would be in India this month to work out the details.

Mr MV Kotwal senior executive VP and member of the board of Larsen & Toubro said that ''They have initiated talks with us, but it is too premature to comment.''

Port of Rotterdam said that it is looking at investment opportunities in India as it looks to expand its facilities to accommodate increased traffic from Asia.

JSW Energy plans INR 4,000 crore IPO

It is reported that JSW Energy Limited is planning to raise as much as USD 1 billion to build generators and will seek regulatory approval this month and complete the sale by the end of March 2008.

JSW Energy is setting up a 1,000 MW lignite based power plant in Barmer in Rajasthan and a 1,200 MW coal based plant in Maharashtra. It also plans to set up generators in West Bengal, Jharkhand and Andhra Pradesh.

L&T to hive off ready mix concrete unit

It is reported that engineering and construction giant Larsen & Toubro may hive off it’s newly created subsidiary L&T Concrete into a separate company and is considering transferring the INR 1,000 crore ready mix concrete business unit to the new subsidiary.

L&T’s board of directors has recently given their in principle approval for the new entity. The move aims at giving decision making freedom, charting out its own marketing strategy and road mapping its future growth as it expects a 5 fold increase in ready mix concrete demand in the next 5 years.

L&T has 66 ready mix concrete plants across India and plans to add 10 plants annually with a cost of INR 50 to INR 100 crore. L&T’s ready mix concrete business, which is currently having a 25% market share, is growing at an annual rate of 25%.

Hindustan Zinc cuts zinc price by 2.7%

Hindustan Zinc Limited recently announced that it had cut zinc prices by 2.7% or INR 3,000 a tonne to INR 106,800 a tonne, effective immediately. However the price of lead was unchanged at INR 116,300 a tonne.

Bangladesh bans thermal coal import from Meghalaya

It is reported that Bangladesh government has placed an embargo on the import of Meghalaya coal through the trade centre at Suterkandi check post in Karimganj district.

A senior official of India’s central excise and customs department at the check post said that it had received an order to the effect from the department’s counterpart in Dhaka.

The Bangladesh government has stated that the high sulphur content in Meghalaya’s low ash coal is the reason for its embargo. The order said that Meghalaya coal contains 6% of sulphur as against the international norm of 1%.

This is the second time that a ban has been imposed on the export of Meghalaya coal. In 2003, Bangladesh had imposed a 3 month embargo on the import of coal. The ban will hit coal exporters in South Assam and Meghalaya.

Indian zinc capacity reaches 600,000 tonnes

It is reported that, with Hindustan Zinc Limited recently commissioning a 170,000 tonnes per annum smelter at Chanderiya in Rajasthan, India's zinc smelting capacity has breached the 600,000 tonnes per annum mark. This paves the way for the country to emerge as a potential exporter of the metal in coming years, in contrast with its importing status just a few years ago.

India's zinc capacity has more than trebled since the last 5 years. In 2002, before Vedanta acquired controlling interest in HZL through the public disinvestment route, the total zinc capacity was only around 180,000 tonnes per annum.

Hindustan Zinc has a zinc smelting capacity of 570,000 tonnes per annum from 3 locations of Chanderiya, Debari and Visakhapatnam. The Chanderiya facility in Chittorgarh district has 3 smelters aggregating 440,000 tonnes per annum. To support the increased production capacity at Chanderiya, HZL's Rampura Agucha mine in Rajasthan is also being expanded to increase ore production from 3.75 million tonnes per annum to 5 million tonnes per annum.

Official estimates suggest that zinc demand would be 491,000 tonnes in 2007-08, growing annually by 9% to 12%. For 2011-12, the terminal year of the ongoing 11th Plan period, domestic zinc demand is expected to be 667,000 tonnes. With 600,000 tonnes technically possible from primary producers and a significant contribution coming from the recycling route, the domestic demand would not only be fulfilled, but an exportable surplus is a distinct possibility.

Ramsarup Industries secures major order from NEFR

Ramsarup Industries Limited has informed BSE that it has bagged order worth INR 44.00 crores from North East Frontier Railways for wires. The order will be executed within current quarter.

HEC makes one more 100 tonne ladle crane for NINL

Ranchi Express reported that Heavy Engineering Corporation has manufactured one more 100 tonne ladle crane, which will be supplied to Neelachal Ispat Nigam Limited.

A team of NNL officials has inspected the crane and gave their green signal to supply. It is expected that it would be dispatched in January 2008.

Recently, the HEC had successfully mechanized 180 tonnes ladle crane for the NINL in the SFW shop of Heavy Machine Building Plant. It has been manufactured as per schedule.

It also has orders from the Bokaro and Bhilai Steel Plant to manufacture more than 50 such cranes. In future, some more orders are expected from other steel plants of the country. Efforts are also being made to get further companies.

CEA not to consider captive power plants below 25 MW capacity

It is reported that the standing committee set up by the Central Electricity Authority to examine the proposals for grant of coal linkage and coal blocks has decided not to consider captive power plants below 25 MW capacity. The committee members decided that captive power plants with unit size of 100 MW and above having better efficiency may be accorded linkage priority as compared to smaller size units for allocation of coal linkage by the standing linkage committee subject to readiness of the project.

Speaking to Projects wire, the committee members said that for optimum utilization of coal, bigger size units with higher steam parameters having higher plant efficiency should be considered. This would also prevent from mushrooming of small units leading to environmental degradation.

It is noted that there are currently 230 proposals of captive power plants totaling to a capacity of 10,914 MW pending in the ministry of coal, out of which captive power plants below 25 MW capacity total to 155 applications and total capacity of 2,444 MW.

Kerala cabinet approves Kochi Metro rail project

Mr VS Achuthanandan chief minister of Kerala said that state cabinet has approved the INR 3,000 crore Kochi Metro rail project and sent it to the centre for ratification.

Mr Achuthanandan said that the project envisages having rail transport facility on an elevated platform between Aluva and Tripunithura covering a distance of 25 kilometer and would be implemented by Delhi Metro Corporation. He added that it is a JV project of the state and centre and funds for the project would be mobilized by all partners.

The state's share in the project would be INR 450 crore and it was also proposed to set up a corporation similar to the Delhi Metro Corporation to execute the project.

Work on new Mumbai Port terminal to begin by March 2008

It is reported that work on Mumbai Port Trust's INR 1,228 crore offshore container terminal is likely to begin by March 2008.

Mr Ashok Kumar Bal deputy chairman of Mumbai Port Trust said that “The consortium led by Gammon India, which has been awarded the offshore container terminal, is expected to achieve financial closure in the next few weeks and construction of work would start immediately, latest by March 2008 and will be commissioned by 2010.”

He added that construction of the offshore container terminal would add 12 million tonnes capacity to the port.

Mr Bal said that besides the container terminal, the port plans to redevelop existing harbor wall berth, build a 2nd chemical jetty, a 5th oil berth and explore the possibility of making Mumbai a cruise hub in India. He added that though these projects were conceived in 2007, work is expected to start in 2008. The proposed new chemical jetty, approved by the centre, would cost INR 116 crore.

Mumbai Port Trust also plans to redevelop 3 harbor wall berths at a cost of INR 353 crore to enable it to receive over dimensional and deep drafted cargo vessels. Presently, the draft is only 7.5 meters to 8 meters. Once the redevelopment takes place, the draft would increase to 14 meters. The 5th oil berth, which would add 17.8 million tonnes of capacity, will be commissioned by 2012.

Malaysia raises ceiling price for rebars and billets by 12%

It is reported that Malaysia government has raised the ceiling price of steel bars and billets, which are price controlled items, by 12% across the board. The Malaysia domestic trade and consumer affairs ministry announced the price revision in a December 28th 2007 circular to the Malaysian Iron & Steel Industry Federation.

Following the announcement, the various types of billets are now priced between MYR 1,907 and MYR 2,035 per tonne from between MYR 1,703 and MYR 1,817 previously. It added that prices of mild steel round bars and high tensile deformed bars are revised to between MYR 2,225 and MYR 2,419.

The price hike, however, would not be a windfall for steel millers, who have incurred higher raw material costs due to rising international scrap prices. The increase would help narrow the gap between the local and international selling prices of long steel products, which are widely used in construction. However, international prices are still higher than domestic prices.

Mr Ann Joo Resources Bhd executive director of Datuk Lim Hong Thye said that “The price hike is not a windfall for millers but merely brings the ceiling price closer to the actual market equilibrium level. The increase would help narrow the gap between the local and international selling prices of long steel products, which are widely used in construction. However, international prices are still higher than domestic prices.”

Mr Anthony Chin marketing director of Amsteel Mills Sdn Bhd told StarBiz that “The higher ceiling prices augur well for the steel milling industry. But steel millers' raw material costs have also gone up substantially. We have already suffered from rising raw material costs for six months.”

Resource Pacific rejects Xstrata bid

It is reported that Australian coal mining company Resource Pacific Holdings Ltd rejected Xstrata plc’s AUD 960 million takeover bid by saying that the offer is neither fair nor reasonable.

As per report, an independent expert hired by Resource Pacific valued the business between AUD 3.56 and AUD 4.09 a share as compared with Xstrata’s AUD 2.85 cash offer.

Mr Paul Jury MD of Resource Pacific said "Our board regards Xstrata’s offer as inadequate and this view is supported by the independent expert’s Xstrata should be required to pay for synergies it would be able to extract from Newpac."

Resource Pacific said it would produce 8 million tonnes of coal by 2010 from the Newpac mine, which adjoins Xstrata’s operations.

But Xstrata has disputed the output forecast in Resource Pacifics statement and is considering options for a formal response. Mr James Rickards of Xstrata said that “The company’s production forecasts were optimistic given the project had been delayed. We think they are over-reaching in their expectations of what they can achieve given their current lack of success to date with their existing longwall operations.”

MMX Corumba starts operation of 2nd BF

Brazilian MMX Mineracao e Metalicos SA, further to the Material Fact Notice dated August 6, 2007, announced that MMX Metalicos Corumba Ltda, a 99.9% subsidiary of the Company, has received the Operating Permit no 476/2007, which authorizes MMX Corumba to initiate the industrial operations of the second blast furnace of its Pig Iron Plant in Corumba, Mato Grosso do Sul.

The operating license was granted by the competent State Environmental Institute of Mato Grosso do Sul.

As a result, MMX Corumba commenced the commercial operation of its second blast furnace and should reach full pig iron production capacity 400,000 tons per year in total in the first quarter of 2008.

Steel price soaring in Thai market

According to the World News Thai, the ministry of commerce of Thai announced that the steel price will further increase in the year 2008 since iron ore price, freight rate keep increasing.

As per report one of major reasons is Chinese government decided to increased their export tax on certain steel products, it directly caused long products price increased by almost USD 100 per tonne in Thai market.

Therefore, the Thailand ministry of commerce has decided to increase the steel product price for plate by USD 33.33 per tonne and debar & wire rod by USD 66.66 per tonne.

Castle to expand EU operations by acquisition of Metals UK

It is reported that US based AM Castle & Co is moving on its expansion in Europe market by acquiring UK based Metal UK Group Ltd.

Metal UK owns two processing facilities in UK and Spain and distributes and processes for stainless steel, duplex alloy and high nickel alloy.

In addition to strengthen this acquisition, Castle increased its credit lines to USD 230 million and added capacity. Castle also take this acquisition a springboard to the global market.

Rotterdam Port breaks all records in 2007

It is reported that an estimated 6.4% rise from 2006 throughput volumes for 2007 has made Rotterdam the first European port to handle more than 400 million tonnes of cargo in a year.

As per release port officials are expecting the port to handle a total of 406 million tonnes of cargo in 2007 on the back of a 4.5% increase in bulk cargo traffic and a 10% jump for general cargo. Out of this 406 million tonnes, 105 million tonnes are containers.

2007 also saw Rotterdam become the first European facility to handle 10 million twenty foot equivalent units in a year, with container throughput jumping 12% to 10.8 million TEUs.

Reports say this is the first time in the port's history that more container cargo is being handled than crude oil shipments. Although crude oil traffic fell by 2%, records were broken in several other individual categories such as containers and coal; oil products jumped 24% while RO RO cargo also jumped 24%.

Mr Hans Smit president of Port of Rotterdam Authority said that “It was quantitatively and qualitatively an unprecedented successful year. All expectations for throughput have been exceeded.”

According to Mr Smits, vital progress has been made on Maasvlakte II, Rotterdam's current greenfield expansion drive, while the Betuwe rail freight route project has come back on line. Mr Smits said that “Enormous investments in the port have been guaranteed, with the Shell refinery, the Gate LNG terminal and the container terminals of Euromax and the Rotterdam World Gateway together already representing investment levels of some USD 3 billion.”

Ms Koplowitz hikes Acerinox stake to 13.275%

Thomson Financial reported that Spanish businesswoman Ms Alicia Koplowitz has raised her stake in Acerinox SA to 13.275% from a previous 11.11% according to a filing lodged with stock market regulator CNMV.

New Cuban Venezuelan SS JV in offing

YIEH reported that according to Venezuela’s government’s information, Aceros del Alba, the newly planned Cuban Venezuelan stainless steel joint venture would have an annual capacity of 500,000 tonnes.

As per report, this JV is going to running by a holding company established by both countries.

Horsehead starts new Waelz kiln

Metals Insider reported that US zinc producer Horsehead has started up a second Waelz kiln used to recycle zinc from electric arc furnace dust from the steel industry at its Rockwood facility in Tennessee.

The newly built kiln wills double the location’s current EAF processing capacity. Production, as with the existing kiln, will be sent for further processing to the company’s Monaca zinc refinery in Pennsylvania.

Horsehead has also announced plans to build another EAF dust recycling facility in the Carolinas to treat dust from steel producer Nucor’s plants in the area.

That follows an agreement with Nucor to expand the two companies’ existing commercial relationship to include Nucor’s three steel plants located in the Carolinas.

US weekly crude steel production up by 17.7%YoY

American Iron & Steel Industries reported that in the week ending December 29th 2007, US’s raw steel production was 2.041 million net tons while the capability utilization rate was 85.6%. Production was 1.733 million net tons in the week ending December 29th 2006 while the capability utilization then was 75%. The current week production represents 17.7% YoY increase from the same period in 2006.

Production for the week ending December 29th 2007 is down by 1.9% from the previous week ending December 22nd 2007 when production was 2.081 million tons and the rate of capability utilization was 87.2%.

Adjusted YTD production through December 29th 2007 was 106.473 million net tons at a capability utilization rate of 86.1%. That is a 1.6% YoY decrease from the 108.253 million net tons during the same period 2006 when the capability utilization rate was 87.5%.

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.

CSC and CHS raise domestic prices

YIEH reported that Taiwan’s China Steel Corp and Chung Hung Steel have raised their price lists for the domestic market in January. The price increase range is likely to fall between TWD 800 per tonne.

Affected by this anticipated price change, the local market price is reported around TWD 21,500 per tonne, subjective to the actual demand and quantity.

However, since the transacted price at the downstream mills is difficult to be pulled up, buyers are now very sensitive to the steel material prices.

Metso Minerals to supply cone crushers to BHPB’s Newman Hub project

Metso Minerals announced that it will supply three cone crushers to BHP Billiton Iron Ore for its Newman Hub project in Western Australia. The delivery is scheduled for September 2008. The value of the order is approximately EUR 5 million.

The order includes three Nordberg MP800 cone crushers that are supplied with drive motors, bases and air cooler chillers units. The chiller units are required due to the high temperatures experienced at the site. Installed power per machine is 600kW. The order also includes commissioning assistance and spare parts.

The Newman Hub project is a new plant being built at an existing site. Primary crushed ore will be crushed by the three cone crushers in a closed circuit to produce annually 32 million tonnes of iron ore lump (32mm x 6mm) and fines (6mm x 0mm).

Metso Minerals is a global supplier of solutions, equipment and services for rock and minerals processing. Its expertise covers the production of aggregates, the processing of ores and industrial minerals, as well as construction and metal recycling.

First Nickel Inc cuts 2007 production guidance

Metals Insider reported that Canada’s First Nickel Inc’s main underground crusher at its Lockerby mine in Ontario was out of action for a week in mid December due to mechanical problems. Production was affected and First Nickel has cut its 2007 production guidance to around 1,497 tonne from a previous 3.9 million pounds of payable metal.

Mr William Anderson president & CEO said that "It is unfortunate that this unforeseen problem came up, but our crews have worked hard to bring things on line again. There will be no impact on our production plans in 2008.”

Vietnam economy grows by nearly 8.5% in 2007

According to Vietnam government, Vietnam's economy grew by nearly 8.5% in 2007, the fastest rate in 11 years, after the country joined the World Trade Organization. According to the Vietnam Government Statistics Office, The gross domestic product growth rate of 8.48%, compared to 8.2% in 2006, was one of the highest in Asia but was topped by neighboring China.

The GSO Industry and construction made up 42% of the developing country's economy, followed by the services sector with 38% and agriculture, forestry and fisheries with 20%.

Vietnam, which launched market reforms two decades ago and joined the WTO in January, attracted a record USD 20.3 billion in investment pledges after promising to further open its doors to foreign business under WTO rules.

It added that South Korea topped the list of foreign investors with USD 4.4 billion pledged, followed by the Virgin Islands, Singapore and Taiwan. Total foreign investment in 2006 reached USD 12 billion.

Releasing its final economic estimates for the year, the GSO also said Vietnam was battling an annual inflation rate of 8.3%, driven in part by a 15% jump in food prices and higher fuel costs.

It said that the trade deficit reached a record USD 12.4 billion as a 21.5% rise in export revenues to USD 48.4 billion was outpaced by a 35.5% jump in the cost of imports to USD 60.8 billion.

PT PLN halts Cilacap power plant operations due to coal shortage

Thomson Financial reported that Indonesia's largest power producer, state run PT Perusahaan Listrik Negara will halt operations at one of its coal fired power plants due to coal shortage after bad weather delayed coal shipments. The plant is located in the Central Java town of Cilacap while coal supply comes from Kalimantan.

Mr Mulyo Aji a PLN spokesman said that PLN will optimize power output from other plants that use fuel oil to cover the shortfall that would arise from the Cilacap shutdown. He added that “It means that our oil consumption will rise.”

Mr Aji said that since power consumption in Java and Bali, the country's most densely populated islands, is still below normal due to the holidays, PLN would not have to cut off supply to some customers.

PLN has recently halved the power output from both the Cilacap plant and the Tanjung Jati B plant due to coal shortage. The two plants have a combined capacity of 1,960 MW.

Singapore's GDP contracts to 3.2% in 2007

AP reported that Singapore's economy contracted the first time in more than four years in the fourth quarter as weakness in manufacturing outweighed windfall growth from a construction boom.

According to Singapore ministry of trade and industry's advance estimate showed that Singapore's economy shrank 3.2% from the third quarter on a seasonally adjusted annualized basis. It expanded by 4.4% QoQ in the July to September quarter compared to the second. The contraction marked the biggest decline since the 7.6% drop in the second quarter of 2003.

As per report, Singapore suffered from slower exports of drugs and electronics in the fourth quarter and while services and construction remained healthy, manufacturers may be vulnerable to softer external demand this year.

Its manufacturing output rose just 0.5% from a year earlier in the fourth quarter after growing 10.3% the previous three months. The sector expanded by 5.6% for the full year in 2007. Construction output rose by 24.4% YoY compared to the same quarter a year ago, accelerating from 19.2% growth in the third quarter. Singapore's services sector was also a key growth driver in the fourth quarter, led by financial institutions and a healthy tourism industry. The services sector grew by 8.3% on year in the fourth quarter, matching the pace of the previous three months. For the full year, services expanded 8.1%.

Its gross domestic product rose by 6% YoY from a year earlier, less than the 9% rise posted in the third quarter and coming in short of a poll forecast for 7.8% growth. For the full year, Singapore's economy grew by 7.5% in 2007, less than the 7.9% rise posted in 2006.

Polaris Metals appoints new management

AAP reported that IRON ore hopeful Polaris Metals has appointed a new management team as the company prepares to make the transition from explorer to producer.

As per report Polaris has appointed Mr Jonathon Lea COO to the role of managing director, replacing incumbent Mr Kevin Shultz in the top job. The company has also appointed Mr Alan Tough to executive director of operations.

Polaris said the new appointments would guide the company through its scheduled transition to iron ore producer by 2009.

Polaris 's flagship is the Poondano iron ore project located 30 kilometers southeast of Port Hedland in Western Australia.

Griffin Mining resumes sales of Caijiaying zinc concentrate

UK listed junior Griffin Mining announced that it has resumed sales of zinc concentrates from its Caijiaying mine in China thanks to a rise in local prices. Earlier Griffin had announced a suspension of sales late November, blaming what it called a temporary retracement in the zinc price.

Mr Mladen Ninkov chairman of Griffin said that "Management continues to monitor all facets of the zinc markets, including smelter charges, to ensure that the company receives maximum value for its products for the benefit of the company and its shareholders.”

Production at Caijiaying, which can produce around 18,000 tonne per year of contained zinc, was unaffected by the sales stoppage with production simply being stockpiled on site. The mine has also just started production and sales of precious metals concentrate.

Korean carmakers post record high exports in 2007

Korea.net reported that despite high oil prices and the strong won, Korean carmakers saw record high exports last year. As per report the country’s largest carmaker Hyundai Motor said that its vehicle sales rose by 4.1% YoY to 2.6 million units. Its domestic sales rose by 7.6% to 625,275 units and exports climbed by 3.1% to 1,977,047.

Hyundai’s sister company and second place Kia Motors also recorded a sales rise of 8.3% in 2007 to 1.36 million units. Kia’s domestic sales inched up by 0.6% to 272,330 units and exports jumped by 10.4% to 1,088,461 units.

Renault Samsung Motor, the Korean unit of France’s Renault SA, saw sales increase by 7.4% to 172,347 units. Its domestic sales fell by 1.4% to 117,376 units, while exports jumped by 33% to 54,971.

GM Daewoo Auto & Technology Co., the Korean affiliate of General Motors, had brisk sales last year of 960,186 units, up by 25.2%. Its domestic sales rose 1.7% to 130,542 units and exports, including kits, climbed 29.9% to 829,644.

Yangzijiang bags USD 1.3 billion shipping contracts

Reuters reported that Singapore listed Yangzijiang Shipbuilding has won USD 1.3 billion worth of contracts to build 20 vessels.

Yangzijiang in a statement said that the contracts are to be delivered before July 2012 and therefore would not have a significant impact on the earnings for the financial year that ended December 31st 2007.

Ezz Steel gets license to build new steel plant in Egypt

Egypt’s financial daily Al Alam Al Youm reported that Ezz Steel had been granted a license by Egypt’s General Authority for Industrial Development to build a new steel plant.

The report confirmed Ezz Steel as saying that “What was published about the company obtaining a license to build a new steel plant is accurate.”

Ezz Steel posted a 21% rise in October to December 2007 quarter, citing construction demand in Egypt driving up sales.

Turkish steel export in 2007 up by 10% YoY

According to Turkish Iron & Steel Producers Association, Turkey has exported 8.27 million tonnes of steel in 2007 up by 10% YoY.

Saudi Arab has become the main country to import the steel from Turkey followed by Algeria, Egypt and Kuwait.

USD 50 billion to be invested to develop oil & gas sector in UAE

According to the report by the National Bank of Kuwait, UAE is planning to pump over USD 50 billion into projects in the next 5 years to expand its oil and gas production capacity to face a steady growth in domestic and external demand. Some of the projects have already got under way and they include field development, pipelines, refineries and other sectors.

The report said that “UAE has undertaken several projects intended to boost its oil and gas production capacities and upgrade refinery infrastructure to meet external demand and the fast rising domestic consumption. Over the next 5 years, more than USD 50 billion in funds have been earmarked for field development projects, capacity enhancement and oil and gas pipeline networks, which should raise oil and gas production capacity a further 30% to 4 million barrels per day and 6.5 billion cubic feet per day respectively by 2012.”

It added that the expansion program includes around USD 10 billion already earmarked by ADNOC to raise the production capacity of Upper Zakum from 550,000 barrels per day to 750,000 barrels per day.

The report said “Thirteen international companies are bidding for the SGD project, reflecting the strong appetite for this significant though costly gas reserve. There is also the Dolphin project, a USD 5 billion initiative that aims to transport gas from Qatar's north field by sub sea pipeline. The project started piping its first gas deliveries in 2007 and supplies are expected to reach a total of 2 billion cubic feet per day by early 2009.” It added that the expansion strategy also includes plans to strengthen downstream production capabilities and to enhance the value of energy exports.

The report noted that “But the escalating cost of production and near term restrictions on manpower, materials and services, are likely to stretch the anticipated timeline by several years at least. Moreover, developing further fields will be more difficult as they may need more challenging recovery techniques. Nonetheless, the oil and gas sector attracts large investments, with a rising share shouldered by the private sector. The biggest publicly-funded project is the field development undertaken by ADCO in Qusahwira, Ruwais and Bida Al Qemzan, with a value of USD 1.5 billion.”

Lafarge to buy Orascom Cement in Egypt

Cement maker Lafarge has recently announced that it had agreed to buy Orascom Cement, a unit of Egypt's Orascom Construction Industries, for EUR 8.8 billion, in a deal that would boost its earnings and exposure to high growth emerging markets.

The deal will see Orascom Construction Industries' shareholder Mr Nassef Sawiris take an 11.4% stake in Lafarge and have a seat on Lafarge's board.

Lafarge said that as part of the acquisition, it would take on EUR 1.4 billion of debt. It will finance the acquisition with EUR 6 billion of debt and by raising EUR 2.8 billion in equity. It added that the buying of Orascom Cement would give it a leading position in the Middle East and Mediterranean basin region.

Mr Bruno Lafont chairman & CEO of Lafarge said that "This acquisition of a leading Egyptian group is a decisive opportunity to accelerate our profitable growth strategy in cement in emerging markets." As a result of the transaction, 65% of Lafarge's EBITDA is expected to be generated in emerging markets in 2010, relative to 45% in 2007."

Lafarge also raised its financial targets as a result of this acquisition. Lafarge said that it was expecting net earnings per share of more than EUR 15 in 2010 and free cash flow of more than EUR 3.5 billion in 2010. The deal is expected to be completed at the end of the first quarter of 2008.

SABIC mulls raising capital to SAR 30 billion

Khaleej Times reported that Saudi Basic Industries Corporation is considering increasing its capital from SAR 25 billion to SAR 30 billion by granting 1 bonus share for every 5 shares.

Mr Saud bin Abdullah bin Thenayan Al Saud chairman of SABIC said that the proposal would be discussed by SABIC board of directors at extraordinary general assembly in March 2008.

He said the total number of shares, once approved, would increase by 20% to 3 billion from 2.5 billion. He added that the board also decided to recommend to the general assembly the distribution of dividends at SAR 2 per share for the second half of 2007.

The board of directors also reviewed the company’s performance in 2007 and approved the company’s budget and plan for 2008, aimed at strengthening its competitiveness in the global markets and achieving its strategic objectives.

SABIC operates 6 interlinked strategic business units, namely basic chemicals, intermediates, specialty products, polymers, fertilizers and metals.

Qatar Shipping wins Dolphin Energy deal

The Peninsula reported that Qatar Shipping Company had signed a deal worth QAR 765 million with UAE based Dolphin Energy to build tank storage facilities.

Qatar Engineering & Construction Co, a unit of Qatar Shipping, said that the deal lasting 36 months included planning and construction of low sulphur condensate facilities at Ras Laffan.

SRO to announce winning bid for Saudi rail project in February

Arabian Business reported that Saudi Railways Organization is concluding final preparations of its request for proposal tender documents for the Mecca to Medina rail line in Saudi Arabia.

Saudi Railways Organization has already drawn up a list of qualified bidders and will hand the documents over to them early next year to bid for the project.

It is noted that tenders for the 950 kilometer long land bridge rail project were submitted in November 2007 and the SRO will announce the winning bid in February 2007.

Arab state’s oil revenues exceed USD 450 billion in 2007

According to regional estimates, Arab states are projected to net their highest oil export earnings of more than USD 450 billion in current prices in 2007 but their real income could be USD 100 billion lower in 1995 real dollar prices. In 1970 dollar prices, the revenues could be as low as third their nominal income, taking into account inflation, the declining US dollar and other factors.

The 6 GCC states and their fellow members in the 22 nation Arab League pumped about 23 million barrels per day of oil and condensates in 2007 and output is expected to have remained unchanged in 2007. It was their highest oil and condensate production levels since they began pumping crude more than half a century ago and oil prices were expected to match that surge by soaring to a record USD 70 in current prices in 2007.

A source at the Kuwait based OPEC said that “Arab states earned a record USD 339.1 billion from oil exports in 2006 and the earnings were expected to peak at over USD 450 billion in 2007. That is in current prices but in fixed 1995 prices, the earnings could be below USD 350 billion this year. It is still a record level since 1995 but if you consider the real value in 1970 price, then the income this year could be below a third of what the Arab countries earned during the oil boom of 1980s.”

According to OPEC, the average price of its basket of crudes is projected to soar to a new record of around USD 68 a barrel in 2007 as demand remained strong. It added that the price could stay as high as USD 60 to USD 70 in 2008. It has not yet released oil income figures for 2007 but sources said the UAE and its partners in the GCC are forecast to earn over two thirds of the total income given their high production of around 15.5 million barrels per day.

Iran’s auto production in 8 months up 16% YoY

Mehr News Agency reported that Iran has witnessed a 16% YoY rise in the vehicle production in the March to October 2007 period.

According to Barnameh magazine, some 790,000 vehicles including sedans, pick ups, double differential cars, trucks, vans, minibuses, and buses have been manufactured in the Iran during March to October 2007 period.

Sarha 1 exploration well begins drilling in Oman

It is reported that consortium of Oilex of Australia, Videocon Industries, GAIL, Bharat Petroleum Corporation and Hindustan Petroleum Corporation has begun drilling on the exploration block in Oman.

The Sarha 1 exploration well was spudded on December 31st 2007 and will be drilled in the Block 56 using the Abraj Rig 2004 to a total depth of 1,650 meter.

Oilex, Videocon and GAIL India hold 25% interest each in the Block 56 while HPCL and BPCL have 12.5%.

Tenaris inks long term corporation agreement with Sinopec

Mr Zhenying Jiang president of Sinopec Procurement Subsidiary and Mr Marcelo Ranieri area manager of Tenaris in China have signed a MoU in November 2007 to serve as the foundation for strategic, long term cooperation between the two parties and designating Tenaris as one of Sinopec's preferred international suppliers.

The scope of this MoU not only includes OCTG products but also pipeline and process products as well as ancillary services for Sinopec's operations in China and focuses on high end products, including sour service applications, high alloys and premium connections, among others.

Mr Renwar Berzinji commercial director for Tenaris in China said that “This MoU enables Tenaris to provide more complete and tailor made solutions according to Sinopec's needs.”

Sinopec is the largest petroleum refining enterprise in China and also is the second largest oil and gas producer in China.

Baosteel unaware of bid for Vedanta

Baosteel Group Corporation said that it is unaware of a plan to bid for parts of copper and zinc producer Vedanta Resources Plc after the Financial Times said that it may make an approach.

Mr Zhu Fukang Baosteel's head of external affairs said that he was unaware of a bid.

Financial Times, without citing sources, said in a stock market report that Baosteel may bid for Vedanta's operations in India and Zambia. It added that the offer would leave the company's majority shareholder, the Agarwal family, with Vedanta's smelter operations.

China closes more than 10,000 coal mines in last 3 years

Mr Li Yizhong head of the State Administration of Work Safety said that China had closed 10,412 coal mines in the last 3 years amid efforts to improve workplace safety and to check extravagant use of natural resources.

Mr Yizhong said that another 1,100 coal mines must be shut soon as the government had ordered the closure of 11,618 coal mines by the end of November 2007.

He added that “China had been striving to improve work safety in its accident prone coal mines. But they were still frequent as enforcement was lax and mine owners pushed production beyond safety limits to earn higher profits.”

Mr Li said that "As existing small mines were being shut down, new ones were being opened." He added the work safety situation remained grave because colliery accidents were still prominent.

In 2006, China produced 2.4 billion tonnes of coal. Accidents in small mines with an annual capacity below 300,000 tons each, however, claimed 3,431 lives.

Chinese government had set a target of closing about 10,000 small coal mines between August 2005 and mid 2008. Such mines accounted for one third of China's total coal output but two thirds of the deaths from colliery accidents.

Chinese mould steel use may reach 1 million tonnes by 2010

According to China Mould Industry Association, Chinese mould market is developing greatly and according to the current development speed, the mould steel use in China will be increased to 1 million tonnes by 2010.

In current mould steel market in China, plastic mould steel accounts for 50% and the demand is expected to grow further.

However, China’s output growth of mould steel is not obvious, high grade mould steel needs to be imported and the imported volume is increasing. According to statistics, imports mainly came from Japan, Germany, Sweden, Austria, South Korea and other countries.

It is learnt that the international steel direction of development is to improve the purity of steel, mould steel commonly adopt vacuum degassing to ensure the quality.

China would have to bid for other half of El Mutún

It is reported that the Chinese government has expressed interest in developing 50% of the El Mutún iron ore deposit in Bolivia's Santa Cruz department.

An official from Bolivia's mining ministry told BNamericas that "China expressed interest but it was made clear that once the reserves on that half are confirmed, after surveys and exploration are finished, it would have to participate in a bidding process similar to the previous one."

The details of the bidding process will be announced after a committee of Bolivian and Venezuelan experts determine the resources, the development possibilities and the technical characteristics on that portion of the deposit.

It is noted that India's Jindal Steel & Power Limited was awarded the concession for the other half in a bidding process in mid 2006 and later signed a contract with the Bolivian government to invest USD 2.1 billion over 8 years to develop iron and steel operations.

The governments of Bolivia and Venezuela signed a letter of intent in September 2007 to set up a JV between the countries for developing the other half of El Mutún, which according to previous estimates has reserves of 40 billion tonnes in total. The official said that "In the meantime, a technical delegation from the Venezuelan government is in El Mutun area where a group of steel technicians have kicked off studies to determine resources on the other 50% of the deposit."

China issues list of authorized coke exporters for 2008

China’s ministry of commerce has issued announcement number 113 2007 on December 29th 2007, revealing the authorized coke exporters for year 2008.

The list covers 55 enterprises, with 39 doing general trade and 16 border trade as follows

General trade

Source: Foreign trade department, ministry of commerce

Border trade

Source: Foreign trade department, ministry of commerce

Export tax hike may not damage Chinese coke makers margins

China has increased export tax on coke and semi coke products by 25%. Meanwhile, import tax on coke and semi coke products is cut down to 0%, so the increased export tax would stimulate further rise of coke price and margins in coke exporters could not be damaged.

Industry experts noted that current supplies of coke in both domestic and international market are short, which will give advantages to producers to transfer higher production cost caused by increased export tax.

Due to strong demand for coke in domestic market, coke price has been raised for seven times in this year and cumulative growth of coke price in province Shanxi is as much as CNY 560 to CNY 640 per tonne.

According to current prices in domestic and international market, there are no big differences in margins by export and domestic distribution after that the export tax is increased to 25%.

UBS rejects reports of manipulation in PetroChina shares

Global investment bank UBS AG has recently rejected Chinese media reports that claimed that it had improperly manipulated Hong Kong listed shares and warrants in China’s top oil company PetroChina.

UBS AG said that “UBS AG was surprised by articles published in the 21st Century China Business Herald and other media in China. These allegations are entirely new and at this stage UBS does not believe that they have any merit whatsoever.” It added that it had strict procedures to prevent illegal activities.

It is noted that 21st Century China Business Herald had quoted unnamed securities industry sources as saying the UBS AG had profited through alleged insider trading and manipulation of the shares shortly before its China venture helped underwrite PetroChina’s USD 9 billion public offer in Shanghai in October 2007.

PetroChina’s Shanghai listed shares more than doubled from the offer price on their first day of trade in early November 2007, beating analysts’ expectations, but fell over 30% in the following 6 weeks.

China exported 2.9 million tonnes of ferroalloy in 11 months

China had exported 2.933 million tonnes of ferroalloy in January to November 2007 period.

Japan was China’s main export destination with 1 million tonnes of ferroalloy or 34.6% share followed by South Korea with 0.33 million tonnes or 11.4% share and Holland with 0.24 million tonnes or 8.3% share during the January to November 2007 period.

In November 2007, China had exported 0.26 million tonnes of ferroalloy. China exported 0.1 million tonnes of ferroalloy to Japan, followed by 0.027 million tonnes to South Korea and 0.023 million tonnes to Holland in November 2007.

China’s country wise ferroalloys export destinations are

In million tonnes

Bagang’s number 2 coking oven put into operation

It is reported that Baosteel Group Xinjiang Bagang has brought its number 1 and number 2 coking oven into operations on November 23rd 2007 and December 16th 2007 respectively. The coke ovens were contracted by Sinosteel Facility Company.

The number 2 coking oven has entered trial production phase with healthy running state.

TISCO develops T1250 ultra high strength steel

It is reported that TISCO has successfully exploited T1250 ultra high strength steel and created the world's highest intensity record in hot rolled products.T1250 ultra high strength steel, which can be widely used in engineering machinery and other special industries.

The equipments and control systems of 2,250 hot rolled production lines represent the world’s highest level of traditional hot rolled mills and also the most advanced hot rolled stainless production line in the world. After the commissioning of this production line, TISCO had successfully exploited T700, TH800 high strength steel and T1250 ultra high strength steel.

At present, TISCO can produce X80 pipeline steel, dual phase steel, TRIP steel, ultra fine crystal steel, fire resistant weathering steel for high rise buildings, high performance steel for engineering machinery, all the products can meet users’ requirements in different industries.

Sichuan Province discovers 1.3 billion tonnes coal

According to land & resources office, China’s Sichuan province has discovered 1.3 billion tonnes of coal reserves and 700 million tonnes of pyrite reserves.

Land & resources office said that, after the exploitation of 1.3 billion tonnes of coal reserves, the output can be maintained for 20 years for Sichuan province.

The industry experts believe that for Sichuan province, 1.3 billion tonnes of coal can help alleviate the situation of energy shortage and will play an important role in promoting the industry development in Sichuan province.

WISCO second batch of CDM projects approved by the NDRC

Wuhan iron & Steel Co informed that after first batch of four CDM projects approval, National Development and Reform Commission has granted approval for second group of four CDM projects recently. The approved applications included on the 2nd, the 4th, the 7th BF TRT power generation and coking companies on the 9th, the 10th CDQ project.

The development of recycling economy Planning Department Director Huang said that CDM projects approved in recent years WISCO vigorously develop recycling economy, the implementation of energy-saving greenhouse gas emissions, improving the level of clean production results.

It is understood that the eight projects to meet the design capacity, the projected annual carbon dioxide emission reductions could reach more than 300 million tonnes, Wuhan Iron and Steel Company will be the annual emission reduction benefits nearly CNY 300 million.

Shell China acquires 55% stake in Shanxi CBM venture

It is reported that Shell China Exploration & Production Company Limited has acquired 55% equity interest in a coal bed methane venture in North China's Shanxi Province and will take over as its operator.

China's ministry of commerce recently approved an agreement for Shell to acquire Canada based Verona Development Corporation's majority equity position in a 30 year production sharing contract covering the North Shilou block. Verona maintains a 5% interest in the venture, with China United Coalbed Methane Company holding the remaining 40% equity. The exploration phase of the production sharing contract will end in December 2010. Following this, the PSC stipulates 5 years of development and a 20 year production period.

Mr Lim Haw Kuang executive chairman of Shell Companies in China said that the North Shilou production sharing contract was another important step for the Shell Group in developing a significant, long term business in China and globally. Shell is confident that its upstream technologies and expertise can help unlock the vast potential of coal bed methane in China.

This was the first contract signed by Shell to develop China's rich coal bed methane resources. This is Shell's third upstream production sharing contract venture in China, after the Xijiang offshore oil development in the South China Sea with CNOOC and ConocoPhillips and the Changbei gas field in the Erdos Basin with PetroChina.

According to a white paper titled ‘China's Energy Conditions and Policies’, China will encourage the development of coal bed methane and foreign investment in unconventional energy exploration and development. China has CNY 31 trillion cubic meters of coal bed methane resources with CNY 16 trillion considered to be easily recoverable.

Qingdao handled more than 9 million TEUs in 2007

China’s 3rd largest container port Qingdao has handled more than 9 million TEUs till December 13th 2007 up by 23% YoY, making it one of the top 10 container ports in the world.

As this year closes, the port’s Qingwei container terminal is expected to see its throughput grow by 31.6% to 250,000 TEU. The Riqing container terminal’s throughput is estimated to reach 430,000 TEUs up by 70% YoY.

Scrap laden MV Vanessa sinks in Sea of Azov

It is reported that Ukrainian rescue services have resumed search for eight missing crewmembers of a Bulgarian cargo ship that sank in the Azov Sea between Ukraine and Russia on Thursday.

An emergencies service spokesman said that MV Vanessa, carrying scrap metal, with 11 crew members, of whom 10 were Bulgarian citizens and one a citizen of Ukraine, sank at 6.00 AM Moscow time on Thursday in the Sea of Azov, about 30 miles from the Kerch Strait.

He added that so far one Bulgarian mechanic has been rescued and two bodies have been found by now.

Earlier it was reported that four bodies were discovered. Yesterday the search was suspended because of complicated weather conditions.

Kazinform quotes RIA Novosti reported that last November a storm in the Kerch Strait sank four ships and an oil tanker. At least six sailors died. The incident resulted in about 2,000 metric tonnes of fuel oil spilling into the sea,

Russian government calls for value added production

It is reported that Russian government is determined on boosting high quality steel production by domestic mills to supply the entire local market demand. Russian government hopes the domestic supply can finally achieve self sufficiency in relation to demand.

According to an official Russian report comparing the total output in the first 11 months of 2007 with the same period in 2006; the growth rate for the tubes and pipes was 12% YoY and the growth rate for coating steel products including tinplates was 9% YoY.

Iran - Turkmenistan - Kazakhstan rail project

Mr Murat Atanev Kazakh Ambassador to Turkmenistan recently said that construction of Iran-Turkmenistan-Kazakhstan railway will play a highly important role in expansion of regional cooperation.

Mr Atanev said that the construction of the railway will expedite expansion of economic cooperation in the region and link Central Asian republics with the Persian Gulf and Europe through Iran.

Mr Atanev was further quoted as saying that Turkmenistan, because of transit of Kazakh oil to the Persian Gulf and Astana, due to export of Turkmen gas to Russia, Ukraine, Europe and China, holds an outstanding position.

Russia's Automobile Market Grows by 22% over 2007

FIS reported that the Russian ministry of industry and energy estimates the growth of the Russian passenger car market by 22.1% YoY in 2007 with the share of new foreign models totaling 44% YoY or 1.2 million, used foreign cars imported into Russia in 2007 up by 14% YoY or 360,800.

The share of Russian cars will be 26% or 670,500 and foreign cars assembled in Russia 16% or 419,700 up by 37.3% YoY and 12.8% YoY respectively as compared to 2006.

Gazprom critical of energy measures offered by EU

Itar-Tass reported that a new package of measures in the energy sector, suggested by the European Union, puts many questions, to which there are no replies so far. This idea was stressed by Mr Alexander Medvedev deputy chairman of Gazprom board in an interview which was published by the Paris based Tribune newspaper.

The package of measures, worked out by the European Commission, provides, among other things, for a division of assets of producer companies and supplier companies of energy carriers.

Mr Medvedev said that “We cannot be satisfied with these measures, since they question the ability of gas producers to ensure security of supplies to markets.”

He emphasized that “Besides, these measures put forth the fundamental question about conditions for investments, since our activities are impossible without investments. We have already made huge investments both in and outside Russia and are preparing to make new ones. Guarantees to these investments evoke our concern.”

Mr Medvedev said that “As for an access of companies from third countries it seems to us that this project is of discriminatory nature.”

He said that “We know that these measures provoke various responses in Europe. They have opponents France and Germany.” Mr Medvedev also underlined that “We believe that industrial companies are able to resolve many questions on the development of the gas market and its liberalization without resorting to ‘directives’ which assume the form of a ban on possession of some or other sector of activities.”